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jerryking : value_destruction   5

The decline and fall of Canada’s global corporate superstars - The Globe and Mail
Aug. 16 2013 | The Globe and Mail | Eric Reguly.

Here’s a depressing exercise: Scan the upper reaches of the Top 1000 companies in the July-August issue of Report on Business magazine and try to spot Canada’s global winners.

You could call them Canada’s corporate ambassadors, if they existed.

The short list is exceedingly short:
...Why does Canada, a Group of Seven country that encourages open markets, celebrates innovation and risk-taking, pumps fortunes into R&D, votes in business-friendly governments, is blessed with skilled workers and globally competitive tax rates and sits on the doorstep of the world’s largest market produce so pathetically few global corporate superstars?....It can take decades, a century even, to build a company like Inco or Dofasco. Don Argus, the former chairman of BHP Billiton of Australia, the world’s largest mining group, was right to denounce Canada’s sellout culture. “Canada has lost more head offices than any other country,” he said in 2008, at the height of the resources’ buying and selling spree. “Canada has already been reduced to an industry branch office and is largely irrelevant to the global mining stage.”

Of course, BlackBerry doesn’t really play into the hollowing out story. In retrospect, it should have foisted itself on Microsoft, Nokia or Amazon shortly after it became apparent to investors and tech geeks, if not to the deluded executives at BlackBerry itself, that the iPhone was here to stay. BlackBerry’s value destruction since then has been awe-inspiring. Mr. Lazaridis and Mr. Balsillie were superb entrepreneurs, but failed at keeping the company competitive.

So why does Canada lack global champions? Don’t blame government policies. Blame the sellout culture, nice-guy directors with a propensity to protect the wrong executives at the wrong time and Canada’s classic lack of corporate self-confidence. The upshot is a country that turned into a one-trick pony – oil sands – with a few decent, protected banks and insurers at its side. If Switzerland, the Netherlands and Sweden can churn out global champions, Canada should be able to at least double the rate. The next BlackBerry is not just around the corner.
Blackberry  boards_&_directors_&_governance  brands  branch_plants  competitiveness_of_nations  decline  Eric_Reguly  G-7  global_champions  head_offices  hollowing_out  large_companies  multinationals  oil_sands  sellout_culture  superstars  value_destruction 
august 2013 by jerryking
Internet’s creative destruction in retail just getting started - The Globe and Mail
ROBERT CYRAN

Published Monday, Apr. 29, 2013
the Web's creative-destructive powers are best seen in the overlay of the Internet on traditional industries. Online sales of shoes, furniture and fashion all made the list of rapidly-growing sectors. E-commerce giants like Amazon and Walmart.com usually offer lower prices than traditional retailers – and convenient home delivery. That's bad news for struggling retailers like Sears, Best Buy and J.C. Penney.

Specialty websites, like Zappos for shoes, also offer a wider selection than can be found in rival DSW's bricks-and-mortar shops. The shoe retailer warned that same-store sales are now falling. And the Web's ability to remove middlemen with high fixed costs means nimble startups can dislodge entrenched players. Warby Parker sells eyeglasses for a fraction of the price of the local optician. That also threatens the $25-billion business Luxottica has built in making and selling high-margin spectacles in its LensCrafters, Pearle Vision and Oliver Peoples shops.

The impact of electronic delivery of digital goods, from books to music to games, has long been evident. And it hasn't been pretty for the incumbents. If this latest survey is on the mark, traditional retailers will soon feel the same pain.
creative_destruction  digital_artifacts  retailers  e-commerce  bricks-and-mortar  Amazon  Warby_Parker  value_destruction  home-delivery  Sears  Best_Buy  department_stores  J.C._Penney  bad_news 
may 2013 by jerryking
Go Ahead, Take a Risk
June 22, 2004 | WSJ | By ADRIAN SLYWOTSKY

What are the risks you should be taking but aren't? Most managers treat risk as an unwanted byproduct of the business. They think narrowly of financial, operating, and hazard risks, such as currency fluctuations, employee fraud, and earthquakes. And they defend themselves through practices like hedging, internal controls, and insurance.

But disruptive strategic risks can be a much larger source of value destruction for a firm. I looked back to the bull market of the 1990s to analyze movements of the Fortune 1000 stocks; even then, before the market collapsed, 10% of stocks lost over one-quarter of their value in a single month, primarily because of strategic-risk events.

The most successful companies do not try to simply minimize strategic risk; they embrace such risk by making prudent bets in their growth-oriented strategies. Strategic risks include not just the obvious, high-probability events that a new ad campaign or new product launch will fail, but other less-obvious risks as well: Customers' priorities will change quickly -- as when baby-boomer parents quickly migrated from station wagons to minivans, catching most automakers off guard. New technology will overtake your product -- as mobile telephony has stolen market share from fixed-line voice. A one-of-a-kind competitor will render your business model obsolete -- as the Wal-Mart tidal wave has washed over mid-range department stores.

Although insurance and hedging can't address strategic risks, there are an array of countermeasures that can, including these three:
1) Smart sequencing for new growth initiatives. Look for incumbents that are moving deliberately, leveraging existing assets and customer relationships to gain the experience, knowledge, and reputation necessary to take the next step with confidence.
2) Proprietary information to reduce the risk of each new initiative. Gather and generate proprietary information that produces a depth of insight into the customer's needs and activities that traditional suppliers cannot match. This will make you a supplier of choice, reducing bidding volatility and allow you to plan with greater certainty.
3) Double betting to minimize the risk of obsolescence. When several versions of a new technology are competing to become the standard, it's impossible to predict which will prevail. So smart managers make double bets. Betting on both Windows and OS/2 positioned Microsoft to be the winner, regardless of which operating system prevailed.

Traditional risk management seeks to contain losses. But that's just one-half of the growth equation. By embracing strategic risk, Cardinal, JCI, and other risk-savvy companies have raised their growth potential in addition to reducing their economic volatility. That's important at a time when aggregate market growth is sluggish: The biggest risk of all is not to take the right growth risks for the business.
leaps_of_faith  Adrian_J._Slywotzky  risk-taking  proprietary  sequencing  scuttlebutt  information  growth  strategic_thinking  Mercer  Oliver_Wyman  product_launches  nonpublic  low_growth  slow_growth  insights  customer_insights  value_destruction  disruption  insurance  new_products  obsolescence  countermeasures  volatility  customer_risk  one-of-a-kind  hedging  overly_cautious  risk-aversion  de-risking  double_betting  risk-management  bull_markets  customer_relationships  dark_data  risk-savvy  internal_controls  financial_risk  risks 
june 2012 by jerryking
Contrary Rules for Business Success
Jun. 24, 2009 | The Globe & Mail | by Harvey Schachter.
Reviews The Moneymakers, by Anne-Marie Fink, Crown Business, 310
pages, $32. Fink gets paid to separate the wheat from the chaff in the
corporate world or, to put it in business terms, separate the
moneymakers from the destroyers of shareholder value. Fink is an equity
analyst with J.P. Morgan Asset Management, she has billions of dollars
resting on her assessment of companies and their management.
equity_research  investment_research  books  rules_of_the_game  book_reviews  Harvey_Schachter  slight_edge  signals  noise  value_creation  value_destruction  shareholder_value  JPMorgan_Chase 
february 2010 by jerryking

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